Amazon Web Services Gains Momentum in AI Arms Race
Amazon's cloud computing division, Amazon Web Services (AWS), is growing rapidly and may be a force to be reckoned with in the AI arms race. AWS accounted for about 28% of market share last quarter and generated 21% of Amazon's total revenue in Q2, but contributed 60% of its operating profits.
In contrast to Google Cloud (15% market share) and Microsoft Azure (20% market share), which reported faster growth, AWS' year-over-year growth rate is rapidly accelerating. In Q3 2025, it was 20%, in Q4 2025 and Q1 2026 it jumped to 24% and 28% respectively, and in Q2 it reached a remarkable 37%.
Amazon's massive investments in AI computing infrastructure this year are expected to total around $220 billion, with most of that going into data center infrastructure. This will eventually lead to increased revenue as the company can meet demand for compute resources.